5. Study Questions and Problems #5 Suppose you deposit your paycheck, drawn on another bank. The total money supply in the banking system will_ because: Assets of your bank would increase by a fraction of the amount withdrawn from the other bank. An increase in the assets of your bank by the amount of your paycheck would simply decrease the assets of another bank by the same amount. Assets of the other bank would decrease by more than the amount deposited at your bank.

5. Study Questions and Problems #5 Suppose you deposit your paycheck, drawn on another bank. The total money supply in the banking system will_ because: Assets of your bank would increase by a fraction of the amount withdrawn from the other bank. An increase in the assets of your bank by the amount of your paycheck would simply decrease the assets of another bank by the same amount. Assets of the other bank would decrease by more than the amount deposited at your bank.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6. Required and excess reserves Suppose that Walls Fergo Bank currently has $150,000 in demand deposits and $97,500 in outstanding loans. Assume the Federal Reserve has the reserve requirement set at 10%. Based on this information, complete the following table detailing Walls Fergo Bank's reserves, required reserves, and excess reserves. Reserves (Dollars) Walls Fergo Required Reserves (Dollars) Excess Reserves (Dollars)
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51)Consider the following for National City Bank. If the required reserve ratio is 4 percent, the excess reserves of National City Bank is Assets Liabilities Reserves $10,000 Deposits $100,000 Loans $90,000 Select one: a. $10,000 b. $6,000 c. $3,000 d. $4,000
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